Significant changes to corporate governance and accountability occurred in fiscal year 2002 with the approval of the United States (U.S.) federal Sarbanes-Oxley Act (SOX). Officially titled the Public Company Accounting Reform and Investor Protection Act and signed into law on Jul. 30, 2002, the Sarbanes-Oxley Act was approved for the purpose of improving the accuracy, integrity, and reliability of corporate disclosures and governance as well as regulation with regard to United States securities laws.
The Sarbanes-Oxley Act provides protection to investors and shareholders of public companies by mandating a set of internal procedures regarding corporate accountability, audit requirements, and compliance. The Act covers such issues as establishing a public company accounting oversight board, auditor independence, corporate responsibility and governance, corporate certification requirements, and enhanced financial disclosure including a code of ethics. Further, the Sarbanes-Oxley Act creates an obligation for officers and directors of a company to warrant to their shareholders or to their investors the accuracy of the company's accounting information, the internal controls in place to safeguard the assets of the company, and the validity of the reports and financial statements produced. Accordingly, the Federal Sentencing Commission has significantly enhanced penalties for the more serious corporate crimes, in response to the U.S. federal Sarbanes-Oxley Act.
The Sarbanes-Oxley Act codifies a framework of categories of internal controls for regulating accountability, governance, and compliance with regard to the Act, namely, Risk Assessment, Control Environment, Control Activities, Information and Communications, and Monitoring. Although compliance with the Act serves to mitigate, or avoid completely, any opportunities for fraudulent reporting and any associated risks, the more important aspects of the framework of the Sarbanes-Oxley Act are that it provides the benefits of increased corporate integrity and accountability which can lead to increased stock and overall company value.
Compliance with the Sarbanes-Oxley Act is accordingly an urgent issue for many public companies, particularly the companies that lack knowledge of the Act or that lack the management expertise or capabilities for addressing the Sarbanes-Oxley requirements and implementation of the internal controls for Sarbanes-Oxley compliance.
A need exists for methods for accelerating the process to efficiently establish Sarbanes-Oxley compliance within a company.
A need exists for methods to establish and implement efficiently internal controls testing and monitoring within a company to mitigate any assessed company risks and to provide improvements for company management and operations in compliance with the Sarbanes-Oxley Act.
The present embodiments meet these needs.
The present embodiments are detailed below with reference to the listed Figures.